Treasury, which runs the government's debt-issuance operation, is busy creating about $200 billion of headroom by employing what it calls "extraordinary measures." That should cover about two months' worth of borrowing.

When the two months expire, Treasury will no longer be able to pay the country's bills -- that is, it won't be able to borrow more money to pay for spending already authorized by Congress.

If Congress does not act to raise the debt ceiling, the U.S. will default on its debts. Not good. But this is where the platinum coin comes in. Normally, the Federal Reserve is charged with issuing currency. But U.S. law, specifically 31 USC § 5112, also grants Treasury permission to "mint and issue platinum bullion coins and proof platinum coins."

This section of law was meant to allow for the printing of commemorative coins and the like. But the Treasury Secretary has the authority to mint these coins in any denomination he or she sees fit.

With a $1 trillion coin in hand, Treasury could deposit the money into Fed accounts, and pay its debts in that manner, instead of relying on bond issuance.

And none of this requires Congressional consent. Talk about an elegant solution.

The White House unsurprisingly hasn't commented on the idea. But Rep. Jerrold Nadler is on board. "I'm being absolutely serious," he told Capital NY. "It sounds silly but it's absolutely legal."

What Yahoo fails to explain is that, once such a coin is deposited with the Fed, the magic act really begins. The Federal Reserve would then issue the Treasury in its account a credit for one trillion dollars from which the Treasury could drawn down Federal Reserve notes, or wire dollars to creditors, to pay its bills. Viloa, money printed out of thin air.

But what is everyone getting excited about here? The Fed creates money out of thin air everyday. In fact, a trillion dollars for the Fed is kind of a "been there done that" event. Since the financial crisis hit in 2008, the Fed's balance sheet has expanded by $2 trillion.

Bottom line: It's all magic tricks in one fashion or another. Some just seem a little more insane than others. They are all insane, just the form is different. Printing paper money or minting a trillion dollar platinum coin is all the same, it doesn't increase the productive part of the economy, it just provides the government with more money to bid against you, for the products and services that are available.

BTW: There is already a debate going on as to whose likeness should be stamped on the face of the coin. I suggest the president of Zimbabwe, Robert Mugabe, is the only person that makes sense.

The man is a master at the trillion dollar money print (though he is now a reformed money printer). But, back in the day, pretty much everyone in Zimbabwe was walking around with a hundred trillion Zimbabwe dollars in their pocket, as Mugabe printed and printed more money, and as the country dove deeper and deeper into economic collapse because of the money printing.

The Zimbabwe money printing sent many Zimbabweans into poverty, but it was that money printing that kept Mugabe in some interesting threads.

Or they could simply repudiate the ~$5 trillion or so in non-marketable Treasury Bonds that comprise the Social Security Trust Fund assets and gain a few years of time. True, that would demonstrate that the trust fund was a lie all the time. Foolish columnists also wouldn't be able to claim that Social Security isn't going to run out of money becuase of those bonds either.

It all has to do with a supposed loophole. The treasury is allowed to mint Platinum coins (meant to allow numismatic coins) but the Fed is the only group of thieves that are allowed to coin Gold and Silver by US law (They don't care about the Constitution and don't uphold it, so what it says is irrelevant to them). So the platinum coin is a way for them to work around that. I may have an error or two in my explanation and someone may be able to explain it better than me so take my explanation with a grain of salt. Of course it wouldn't have nearly 1 trillion worth of platinum in it, just the number stamped in it. It is just another stupid Keynesian trick for trying to fool people long enough to fuck them over completely.

I love the idea of the polished turd. Brilliant! If Nadler and the neo-greenbackers (or-brownbackers?) get momentum with this, then we must outbid them and demand that a $2 trillion polished turd be issued. Ron Paul should welcome this as a chance to coalition with the money cranksters--because finally we'll have a precise definition of the dollar after all those hearings where he struggled to get Bernancke to define what a dollar was.

And we should take the same approach with "tax" rates. We should outbid them and demand 5% higher rates, but contingent upon having the word "tax" replaced with the word "theft" in all of the statutes and on all of the confession sheets that the slaves are required to file with their masters. This along with the polished turd currency standard would be a good 1st step in a libertarian 12 step program de-state-ization proposal.

"It all has to do with a supposed loophole. The treasury is allowed to mint Platinum coins (meant to allow numismatic coins) but the Fed is the only group of thieves that are allowed to coin Gold and Silver by US law (They don't care about the Constitution and don't uphold it, so what it says is irrelevant to them). So the platinum coin is a way for them to work around that. I may have an error or two in my explanation and someone may be able to explain it better than me so take my explanation with a grain of salt. Of course it wouldn't have nearly 1 trillion worth of platinum in it, just the number stamped in it. It is just another stupid Keynesian trick for trying to fool people long enough to fuck them over completely."

"To coin money..." Constitutionally means to physically stamp coins; it has absolutely zero to do with issuing money. The Treasury still retains that power.

Sorry, but in Judge Marshall's opinion "to coin" means "to print", "to issue", or "to expel from one's anus." If you don't like our Rule of Law, then you can get on a boat and move to Russia if you think its so nice over there.

That decision was the Butthole decision of 1805 which was further clarified when FDR packed the court with inflationists in the 1930's and they ruled that the government can make farts a tender in the payment of debt--just like turds.

It seems to me that farts are easier to carry around if packaged properly, isn't there some intrinsic value to that?

Btw, my apologies for not posting my name with my posited "polished turd" suggestion-I was embarassed to do so at the time, but having witnessed the response to it I guess I can now claim it with pride now. (well, maybe not pride...but it's not as embarassing as a trillion dollar platinum coin)

I think the hoopla is from the political analysts out there that think they've solved the supposed tea party opposition to a debt ceiling increase. As if the current administration has the ace up their sleeve to circumvent the law. What's interesting to me is that the discussion seems to have morphed from a debate over government spending and debt levels to truly insane ideas of acute currency devaluation. Like the left decided has given up arguing and gone full retard on this.

These people don't do commodity-backed money, and they don't seem to have much imagination. As long as you're minting fiat coins, why not crank out a $200 trillion coin? The deficit could be paid off and all present and future obligations met. Problem solved.

Kind of funny that Rush Limbaugh was discussing this on his radio show and brought up Bitcoin since they weigh so much.

RUSH: Oh, the hell with that. Why don't we just use Bitcoin, to hell with printing up a whole new platinum coin here. Just use Bitcoin, which is the currency on the Internet.

CALLER: Yeah, why go to the trouble of having to get platinum? Why don't we just use, I don't know, bubble gum coins or whatever.

RUSH: I don't know. Anyway, look, I appreciate the call. I enjoy discussing this esoteric stuff that just illustrates above all else how baseless all these fixes are. And that's really what they do. We're $16 trillion in debt. We're heading in another four years for 20, minimum, $20 trillion dollars in debt, and nobody's doing anything about it. We're just coming up with ways to get away with it. We're trying to kick the can down the road so that people who are alive today will not be when this has to be dealt with. Pure and simple. I appreciate the call. Thanks very much.

Suspicions confirmed - our leaders are not only too stupid to deal with the debt, they have gone totally insane and think the answer is to pull a coin out of their ears (asses?) - Look, nothing up my sleve!

If it wasn't so God awful sad, it would be funny. The REAL question is why do we continue to suffer these fools??? Perhaps stupidity is contagious, or, in the process of dumming us down the teacher has become the student...

So where does the trillion in platinum come from? Do we already own it, or will Treasury just create an IOU for it? If WE own it, why not just mint small coins and mailthem out to all TAXPAYING American citizens and let us decide where to spend our own stimulus?

In reviewing the story below and the Trillion Dollar Coin idea this came to mind about the Debt Ceiling issue . Shouldn't this be part of the Debt Ceiling Negotiations ? Why not take a look at this through the spectrum of Healthcare savings accounts as a way to build up the cost saving structure that includes the activity of people searching for healthcare coverage be a part of these states loophole benefit of creating competitive deductions to those states and people who buy healthcare coverage and or seek treatment in those states , say in comparison to how the deduction was offered in terms of use by how “ Mr. Schumer once proposed giving hunters tax deductions for contributions of killed deer to the needy” ? This same theory of the Honorable Senator Schumer could be the way people paying into their health saving account or state Pool or whichever states pool has the most competitive health saving structure, ie: through tax structures and competitive healthcare advantages , the payment by the Individual could be what Guarantees the Minted The Trillion Dollar Platinum Coin that is designed to stabilize the Debt Ceiling , setting up the New Affordable healthcare Financial Structure in a Competitive manner ? If the States could Be made to compete for the Citizens Payment that is usually just a direct state benefit as is described below in the Fiscal Times article , and that payment instead is a Guaranteed revenue of the healthcare for the states and the states then have to Offer and provide healthcare insurance and treatment competitively to then access these tax benefits this would turn the healthcare industry into a better quality cost benefit for the nation , industry and individual I bet ! Why Not use The Trillion Dollar Platinum Coin as a Healthcare Guarantee Reserve ?

This would change the competitive structure of the healthcare industry , something needed to stabilize costs I think .

It doesn't surprise me. But they should switch it up. First since it's going to be a $1,000,000,000 coin it's going to need to be a lot bigger for all those 0s. SO. Put an image of Geither and Bernenke SHITTING on the 1 dollar bill. There you go my 2 cents.